Posted on 05/01/2012 12:48:03 PM PDT by marmar
I am interested in learning how to invest on a small scale from the ground up,to start off with. If anyone can give me some good pointers it would be appreciated. Thanks, for your help before hand. Martha
One word... PLASTICS
This is generally a very good and detailed bit of advice. If you are working with an advisor, especially one with a large firm that has an investment banking division, and your advisor pitches individual stocks to you, make sure you insist on companies that generate measurable positive free cash flow. If he can’t answer the question about the cash flow characteristics of a security he’s pitching then he’s not doing his job.
I have found Morningstar.com to be very helpful. They have a free side and a premium side. A beginner can use the free side to build a foundation and, if you find it useful later on you can subscribe to the premium side which gives you access to their analyst research on specific stocks and mutual funds. Just to tuck away for down the road, the premium service costs about $150 bucks a year but T. Rowe Price investors can access it free once they have 100,000 dollars with the firm. I tend to prefer Price and Vanguard as they are no-load (no commission to brokerage)and were not involved in the after-hours trading controversy a few years back. Good luck!
Sell high, buy low.
If kept in ‘like new’ condition, firearms RARELY drop in value, and look cool in your house. Ammo only increases in value.
I've had brokers. And they made me, well... broker.
Been trading since the 80's....Lost a ton of money...made a ton of money.
Figured out...it's the easy simple stuff that works. KISS...if you will. Keep It Simple Stupid.
I might recommend some good books....Some of the older guy's had it right. Nicolas Darvas...for one.
Investor's Business Daily is a good fish wrap. CAN SLIM is a decent way to trade.
Figure out how to read charts....Focus on a sector, learn the companies.
I can't tell you 30 yrs worth of investing knowledge in one post.
Just some ramblings.....
I actually send out a letter...to some like minded people. And I trade some friends and family accounts.
Like I said....it's all FWIW-
IMHO most financial advisors are not very good.
Concentrate on the basics:
Food, shelter, water, power, transportation.
Everybody needs them.
Your company’s 401k plan gives you no options what so ever on how to invest your contributions? I find that quite unusual. Some 401k plans have limited options but most have at least a few and at least one of each that is low risk, middle risk and high risk, a mix of low interest but relatively stable bonds, mid cap stocks and higher risk high growth potential stocks. And what about your employer match – is their one?
Unless your employer’s plan is absolute crap, has no diversity or investment options what so ever and no employer match or a match that is vested on some sort of ridiculously long time line, don’t under estimate the power of contributing “pre-tax” rather than post tax dollars. If your plan is really that bad, then look into opting out but I’d only do that after a review by a good financial planner, a certified investment advisor and asking questions of your employers plan administrator.
And keep in mind that if you are in your employer’s 401k plan, you might not be able to take advantage of the tax deductions for contributing to a personal IRA account. Hint: if your W-2 has a check next to the box labeled “Qualified Pension Plan” you may not be able to take advantage of a tax deduction for your IRA contributions up to the current IRS limits. I admit to not knowing a lot about Roth accounts but I think the limitations apply if you are actively contributing to an employer sponsored plan.
As far as advice, andy58-in-nh gave you some pretty good advice. It really all depends on many factors including your risk tolerance and investment time horizon, etc.
I’d be very careful investing with just any “stock broker”. There are some very good reputable brokers and then there are “boiler room” operations that will pressure you on rather shady investments with promises of ridiculously high returns and who will magically disappear after you’ve been bled dry by ridiculously high commissions and fees and will be left in the end with worthless stock, not even worth the paper they are written on. Remember that if it sounds too good to be true, it probably is. Do a lot of research first or better yet, find a good financial planner as andy58-in-nh suggested, “one who charges for his or her services based upon assets under management, and who therefore encourages a long-term, flexible strategy to meet your changing needs.”
I’d also be very leery of investing in whole life insurance policies. They often carry high fees and low returns on investment, lock you into a long term contract and have very little or poor choices.
I’d also consider reaching out to anyone you know who is already “rich”, meaning someone of means, a relative, a boss or former boss, etc. someone who has experience in investing who might give you a referral to their investment advisor. Even then I'd still do some due diligence and research and when you meet with any potential stock broker or investment advisor don’t rush into it and approach it as if you are interviewing them for a job, because you are.
Good luck!
Buy a small 10 acre farm and a small tractor.
Be prepared when the bottom falls out.(It is coming).
Here’s how I started. I subscribed to Moneypaper which now is here: http://www.directinvesting.com/
Within two years I owned about 20 different blue-chip stocks, albeit one and two shares each, but the dividends were reinvested and now, 30 years later, I have a decent stock portfolio. I would suggest you call their toll free number if you find the website too confusing. They are a super bunch and it’s a terrific way to get started investing without breaking the bank.
Have fun!
If you want to invest in the stock market you do need a broker. I use a discount brokerage. As stated before you want a cash account with no margins. Set up a simple Yahoo financial account and track stocks before trading. You brokerage will also have screens for you set up to monitor stock prices. Read, listen and only invest “risk capital”. This is money you can afford to lose. You don’t want to be betting the your grocery money on the market. There are books, tv programs (Fast Money and yes Jim Cramer on Mad Money(ducking)). But the ultimate responsibility is on YOU when you invest. You can’t blame the guy on tv, the guy who wrote a book or the crooked manipulated market. If you have any questions I’m sure somebody on here can direct you to a reliable source.
Listen to Uncle Miltie. It’s just about right. The only thing I’d add is, after your balance goes over 6 figures, try to put 5-10% into metals. Gold and silver still have a long way to run. YMMV.
Book: The Ivy Portfolio
Author: Mebane Faber
Book: The Ivy Portfolio
Author: Mebane Faber
Can I quote you?
Miltie, this is assinine.
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